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Proposal for legislation for outlawing “platform parity clauses” in the hotel sector

The Belgian Government proposes legislation to outlaw “platform parity clauses” in the hotel sector.

On 23 November 2017, the Belgian Government proposed draft legislation to outlaw so-called “platform parity clauses” in the hotel sector.

Price parity clauses, sometimes also referred to as ‘most favourite nation clauses’, have become more and more important in contracts between online platforms (e.g. price comparison websites, online booking websites and e-markets) and the companies which use their services. In the hotel sector, those clauses require a hotelier to offer the lowest price on the platform. “Wide” parity clauses preclude a hotelier from offering lower prices on other online platforms; “narrow” parity clauses preclude a hotelier from offering lower prices on its own website.

In recent years, price parity clauses in the hotel sector have drawn the attention of national competition authorities. Different approaches were taken in different countries. The Italian, French, Swedish and Swiss Competition Authorities accepted commitments from a platform to discard “wide” parity clauses, but they still allowed “narrow” parity clauses. The German Competition Authority, however did not follow this coordinated approach and prohibited both types of price parity clauses.

Consequently, legislators in France, Austria and Italy, stepped in and banned both “narrow” and “wide” parity clauses in the hotel sector in their countries.

The Belgian Government is now proposing a draft bill to follow suit. From the Government’s communication it can be inferred that it intends to prohibit both “wide” and “narrow” price parity clauses in the hotel sector.